RANCHO MIRAGE, California President Barack Obama told Chinese President Xi Jinping on Friday that the United States welcomed China's "peaceful rise" as a world power and said the two countries must work together to resolve thorny issues like cybersecurity.

At the start of a two-day summit at a luxurious desert estate in southern California, Obama said the world's two biggest economies must strike a balance between competition and cooperation to overcome the challenges that divide them.

But tensions over cybersecurity could test the two leaders' ability to get along in meetings billed as an informal get-to-know-you encounter at the Sunnylands estate near Palm Springs.

Obama plans to complain to Xi about suspected Chinese hacking of U.S. secrets, even as the White House faces growing questions at home over American government surveillance.

"The United States welcomes the continuous peaceful rise of China as a world power," Obama said as the two leaders delivered statements before sitting down for closed-door meetings.

But touching on U.S. concerns, he also said Washington seeks "an international economic order where nations are playing by the same rules, where trade is free and fair and where the United States and China work together to address issues like cybersecurity and protection of intellectual property."

Xi, meeting Obama for the first time since assuming the presidency in March, expressed the hope that China and the United States could build a new model of "big country" relations - alluding to his desire that Beijing be treated more in line with its growing international clout.

"Relations between our two countries are at a new historical starting point," Xi said, describing the talks as a chance to "chart the future" of China-U.S. relations.

Obama wants Xi's assurance that he takes seriously accusations of growing Chinese cyber spying, including snooping on advanced U.S. weapons designs, and will take action to curb the problem.

But Xi, who made no mention of cybersecurity in their brief appearance before reporters, may not be in a conciliatory mood.

He is expected to voice discomfort over Washington's strategic "pivot" toward Asia, a military rebalancing of U.S. forces toward the Pacific that Beijing sees as an effort to hamper its economic and political expansion.

And Obama's protests about Chinese cyberspying might be blunted by news that the U.S. government has been quietly collecting the telephone records of millions of Americans as part of U.S. counter-terrorism efforts.

On the eve of the California summit, more questions were raised about the extent of U.S. government domestic spying when the Washington Post reported that the National Security Agency and the FBI are also tapping into the central servers of leading American Internet companies to examine emails and photos. But major tech companies said they do not provide any government agency with "direct access" to their servers.

(Editing by Alistair Bell and Paul Simao)

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